Tango announces $280 million funding led by Alibaba

MOUNTAIN VIEW -- Mobile messaging service Tango said Wednesday it has received $280 million in venture funding, primarily from China's e-commerce giant Alibaba.

Tango's alliance with Alibaba, which led the way with $215 million, is "extremely exciting for us," said Eric Setton, a Stanford Ph.D in electrical engineering who went on to co-found Tango and now serves as the company's chief technology officer. The company started three years ago as a mobile video platform and has rapidly expanded into texting, games, music and social networking.

The other $65 million comes from previous investors.

Setton, who has family in France, and Uri Raz, a former Israeli Army tank commander, founded Tango in 2010 to create a way to make free video calls back home on their mobile devices.

Tango co-founders Uri Raz, left, and Eric Setton. (Tango photo)

Shortly after they founded Tango, Apple CEO Steve Jobs launched the first iPhone capable of video calling, and Tango had 1 million members 10 days later.

"We were blown away," Setton said.

Since then, the privately held company has expanded rapidly and now has 200 million registered users.

In June, Tango launched the first of 30 games produced by third-party developers. In November, Tango announced a partnership with the online music service, Spotify, that has since resulted in hundreds of millions of music downloads.

Tango, which is on a hiring binge, also plans to double its 120-person Mountain View staff next year, in addition to a couple dozen more employees it has in Austin, Texas.

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"This money will allow us to pursue aggressively very premium content through partnerships," Setton said. "Our co-founder is a former tank commander in the Israeli Army. He knows how to go fast and straight."